Legitimising autocracy: re-framing the analysis of corporate relations to undemocratic regimes

Figures & data

Table 1. Main results.

	(1)	(2)	(3)	(4)
Dependent variable	Democracy	Democracy	Democracy	Democracy
Sample	Autocracies	Autocracies, low performance legitimation	Autocracies, high performance legitimation	Autocracies
FDI per capita	–0.028***	0.088	–0.028***	0.111
	(0.01)	(0.08)	(0.01)	(0.10)
Interaction FDI per capita * Performance legitimation				–0.036
				(0.02)
Performance legitimation				–0.046
				(0.05)
GDP per capita (ln)	0.003	0.181	–0.071	0.007
	(0.06)	(0.15)	(0.08)	(0.06)
Oil and gas rents per capita (ln)	0.024*	0.048**	0.012	0.025*
	(0.01)	(0.02)	(0.02)	(0.01)
Neighbouring countries democratic	0.064**	0.161**	0.029	0.063**
	(0.03)	(0.08)	(0.03)	(0.03)
Civil war	0.017	–0.059	0.050	0.009
	(0.03)	(0.05)	(0.04)	(0.03)
Interstate war	0.027	–0.088	0.086	0.029
	(0.08)	(0.07)	(0.07)	(0.07)
Constant	0.359	–1.383	1.158*	0.464
	(0.55)	(1.25)	(0.69)	(0.58)
Country fixed effects	Yes	Yes	Yes	Yes
Year fixed effects	Yes	Yes	Yes	Yes
r2	0.203	0.292	0.193	0.207
N	3161	906	2255	3161
Countries	123	59	101	123

Note: Fixed effects regressions, standard errors clustered at the country level in parentheses. All independent variables lagged one period, see Table 1 for their definitions. *** indicates significance at the 1% level, ** at 5%, * at 10%.

Figure 1. Marginal effects of FDI per capita on Democracy, by performance legitimation levels (95% confidence interval).

Table A1. Main variables.

Variable	Explanation	Source
Dependent variables
Democracy	Regimes of the world index (0 = Closed autocracy, 1 = Electoral autocracy, 2 = Electoral democracy, 3 = Liberal democracy).	V-Dem Dataset v10
Democracy (Polity)	Revised Combined Polity Score: Computed by subtracting the Polity IV autocracy score from the Polity democracy score. Range: -10 (strongly autocratic) to 10 (strongly democratic).	Quality of Government standard dataset
Independent variables
FDI per capita	Foreign direct investment per capita (1000 constant 2010 USD).	Adapted from the World Bank World Development Indicators.
Performance legitimation	Extent to which the government refer to performance in order to justify the regime in place. (Ordinal scale: 0 - Not at all, 1- To a small extent, 2 - To some extent but it is not the most important component, 3 - To a large extent but not exclusively, 4 - Almost exclusively)	V-Dem Dataset v10
GDP per capita (ln)	Gross domestic product per capita (constant 2010 USD, logged).	Adapted from the World Bank World Development Indicators.
Oil and gas rents per capita (ln)	Oil and gas rents per capita (constant 2010 USD, logged).	Adapted from the World Bank World Development Indicators.
Neighbouring countries democratic	Average Polity democracy score for countries whose capital is within 4000 km from country in question	Adapted from the V-Dem v10 dataset and the CEPII GeoDist dataset
Civil war	Incidence and intensity of civil war in country (0 - no civil war, 1 - minor civil war (between 25 and 999 battle-related deaths in a given year), 2 - major civil war (at least 1,000 battle-related deaths in a given year).)	Adapted from the UCDP/PRIO Armed Conflict Dataset Version 20.1
Interstate war	Incidence and intensity of interstate war in country (0 - no interstate war, 1 - minor interstate war (between 25 and 999 battle-related deaths in a given year), 2 - major interstate war (at least 1,000 battle-related deaths in a given year).)	Adapted from the UCDP/PRIO Armed Conflict Dataset Version 20.1

Table A2. Summary statistics.

Variable	Obs	Mean	Std. Dev.	Min	Max
Democracy	3,161	0.61	0.49	0	1
Democracy (Polity)	2,237	−5.74	2.77	−10	0
FDI per capita	3,161	0.18	0.87	−6.79	16.41
Performance legitimation	3,161	2.63	0.90	0	4
GDP per capita (ln)	3,161	7.64	1.24	5.36	11.66
Oil and gas rents per capita (ln)	3,161	2.51	3.33	−9.42	11.04
Neighbouring countries democratic	3,161	3.54	1.68	0.24	8
Civil war	3,161	0.29	0.58	0	2
Interstate war	3,161	0.03	0.22	0	2

Table B1. Results using Polity democracy variable.

	(1)	(2)	(3)	(4)
Dependent variable	Democracy (Polity)	Democracy (Polity)	Democracy (Polity)	Democracy (Polity)
Sample	Autocracies	Autocracies, low performance legitimation	Autocracies, high performance legitimation	Autocracies
FDI per capita	−0.263***	−0.042	−0.256***	0.080
	(0.05)	(0.48)	(0.06)	(0.34)
Interaction FDI per capita * Performance legitimation				−0.088
				(0.09)
Performance legitimation				−0.182
				(0.39)
GDP per capita (ln)	−1.124***	−2.223**	−0.712	−1.083***
	(0.39)	(0.86)	(0.56)	(0.39)
Oil and gas rents per capita (ln)	0.023	0.085	0.137	0.022
	(0.06)	(0.07)	(0.12)	(0.06)
Neighbouring countries democratic	0.521***	0.062	0.549***	0.530***
	(0.18)	(0.26)	(0.20)	(0.17)
Civil war	0.282	0.011	0.288	0.277
	(0.21)	(0.34)	(0.27)	(0.21)
Interstate war	0.347	0.088	−0.453	0.310
	(0.40)	(0.21)	(0.42)	(0.39)
Constant	2.328	13.279*	−1.691	2.432
	(3.55)	(6.61)	(5.05)	(3.56)
Country fixed effects	Yes	Yes	Yes	Yes
Year fixed effects	Yes	Yes	Yes	Yes
r2	0.429	0.524	0.423	0.428
N	2237	627	1610	2213
Countries	106	47	81	105

Note: Fixed effects regressions, standard errors clustered at the country level in parentheses. Dependent variable is the Polity democracy variable. All independent variables lagged one period, see Table 1 for their definitions. *** indicates significance at the 1% level, ** at 5%, * at 10%.

Figure B1. Marginal effects of FDI per capita on Polity Democracy variable, by Performance legitimation levels (95% confidence interval).

Table B2. Results excluding China and Hong Kong from the sample.

	(1)	(2)	(3)	(4)
Dependent variable	Democracy	Democracy	Democracy	Democracy
Sample	Autocracies ex. China and Hong Kong	Autocracies, low performance legitimation, ex. China and Hong Kong	Autocracies, high performance legitimation, ex. China and Hong Kong	Autocracies ex. China and Hong Kong
FDI per capita	−0.031***	0.085	−0.029***	0.115
	(0.01)	(0.09)	(0.01)	(0.10)
Interaction FDI per capita * Performance legitimation				−0.038
				(0.02)
Performance legitimation				−0.042
				(0.05)
GDP per capita (ln)	0.030	0.197	−0.067	0.033
	(0.07)	(0.15)	(0.08)	(0.07)
Oil and gas rents per capita (ln)	0.021	0.046**	0.012	0.021
	(0.01)	(0.02)	(0.02)	(0.01)
Neighbouring countries democratic	0.067**	0.169**	0.029	0.066**
	(0.03)	(0.08)	(0.03)	(0.03)
Civil war	0.019	−0.058	0.050	0.012
	(0.03)	(0.05)	(0.04)	(0.03)
Interstate war	0.010	−0.107	0.085	0.013
	(0.08)	(0.08)	(0.07)	(0.07)
Constant	0.148	−1.546	1.138	0.252
	(0.57)	(1.32)	(0.74)	(0.61)
Country fixed effects	Yes	Yes	Yes	Yes
Year fixed effects	Yes	Yes	Yes	Yes
r2	0.206	0.295	0.193	0.210
N	3121	895	2226	3121
Countries	122	58	100	122

Note: Fixed effects regressions, standard errors clustered at the country level in parentheses. All independent variables lagged one period, see Table 1 for their definitions. *** indicates significance at the 1% level, ** at 5%, * at 10%.